28 Jul 2009 07:00
For release at 0700 on 28 July 2009
Highams Systems Services Group plc
("Highams" or "the Group")
The AIM quoted recruitment consultancy and a leading niche provider of business, technology and professional services to the insurance and financial services sectors.
Preliminary Results
for the year ended 31 March 2009
Chairman's Statement
Introduction
Following the Board restructuring and capital reorganisation undertaken last October, Highams has continued to reduce overheads in line with the challenging climate within the recruitment sector. We have made significant cost savings across the Company and will continue to ensure that our overheads are tightly controlled. The second half to March 2009 showed reduced losses at £110k compared to £260k in the first half to September 2008.
We continue to focus in our niche market within the insurance sector and in maintaining the quality of service and delivery associated with our brand.
Although the results for the year are disappointing overall, we have probably endured in the second half of the year arguably the most difficult conditions seen by the recruitment sector as a whole. The current outlook remains uncertain, but we are pleased to report that in the first quarter of this financial year the business has produced a small profit at EBITDA level, and we continue to focus on finding higher value business through our niche networks.
Since the year end, further cost savings have been made. The strategy is to seek profits, whilst maintaining the quality of our offering and the Directors currently expect an improved performance in the current financial year.
Financial Results
Group revenue fell by 22.6 per cent. to £10.5m (2008: £13.6m) as contractor numbers declined during the last quarter of the financial year.
Gross profit was therefore reduced at £1.76m (2008: £2.1m). This represents 16.7 per cent. of revenue, which is slight improvement when compared to 15.6 per cent. in 2008.
Group loss before taxation and impairment was £370,000 (2008: loss of £851,000). The Directors are not recommending the payment of a final dividend for the year to 31 March 2009 (2008: nil).
Executives and Staff
We remain a strong team of very knowledgeable long serving staff; and whilst we are in a challenging market their loyalty and commitment to the group remains positive for which we are extremely grateful.
| Ken Ford Chairman 27 July 2009 |
Enquiries:
| Mark de Lacy , Managing Director | Tel: 01883 341 144 |
| Highams Systems Services Group plc | |
| www.highams.com | |
| Rick Thompson / Carl Holmes | Tel: 020 7149 6000 |
| Charles Stanley Securities (Nominated Adviser) | |
| Tarquin Edwards | Tel: 07879 458 364 |
| Peckwater PR |
Consolidated income statement
For the year ended 31 March 2009
| 2009 | 2008 | |
| Note | £'000 | £'000 |
| Revenue | 10,533 | 13,606 | |
| Cost of sales | (8,768) | (11,481) |
| Gross profit | 1,765 | 2,125 |
Administrative costs
| Other administrative costs | (1,988) | (2,895) | |
| Goodwill impairment | - | (1,071) | |
| Total | (2,082) | (3,966) | |
| Operating loss | (317) | (1,841) | |
| Finance income | 4 | 3 | |
| Finance costs | (57) | (84) |
| Loss before tax | (370) | (1,922) | |
| Tax expense | - | - | |
| Loss for the period attributable to equity shareholders | (370) | (1,922) |
Loss per share
| Basic and diluted earnings per share from continuing operations | 1 | (0.77)p | (6.06)p |
All of the above relate to continuing operations
Consolidated statement of recognised income and expense
For the year ended 31 March 2009
| 2009 | 2008 | |
| £'000 | £'000 |
| Loss for the period | (370) | (1,922) | |
| Foreign currency translation difference | (1) | 4 | |
| Total recognised income and expense for the period attributable to equity shareholders | (371) | (1,918) |
Consolidated balance sheet
At 31 March 2009
| 2009 | 2008 | ||
| Note | £'000 | £'000 | |
| Assets | |||
| Non-current assets | |||
| Intangible assets | 3 | 11 | |
| Property, plant and equipment | 12 | 20 | |
| Total | 15 | 31 | |
| Current assets | |||
| Trade and other receivables | 1,343 | 2,273 | |
| Cash and cash equivalents | - | - | |
| Total | 1,343 | 2,273 | |
| Total assets | 1,358 | 2,304 | |
| Current Liabilities | |||
| Trade and other payables | (1,039) | (1,237) | |
| Borrowings | (256) | (1,196) | |
| Total | (1,295) | (2,433) | |
| Net (Liabilities) / Assets | 63 | (129) | |
| Equity | |||
| Share capital | 2 | 1,597 | 1,594 |
| Share premium account | 2 | 1,239 | 679 |
| Merger reserve | 2 | 90 | 90 |
| Employee share benefit trust reserve | 2 | (61) | (61) |
| Currency reserve | 2 | 3 | 4 |
| Retained earnings | 2 | (2,805) | (2,435) |
| Total Equity | 63 | (129) |
Consolidated cash flow statement
For the year ended 31 March 2009
| 2009 | 2008 | |
| £'000 | £'000 | |
| Operating activities | ||
| Loss for the year after tax | (370) | (1,922) |
| Depreciation of property, plant and equipment | 10 | 14 |
| Amortisation of intangible assets | 8 | 13 |
| Impairment of goodwill | - | 1,071 |
| Net finance costs | 53 | 81 |
| Changes in trade and other receivables | 930 | 662 |
| Change in trade and other payables | (198) | (651) |
| Net cash used in operating activities | 433 | (732) |
| Cash flows from investing activities | ||
| Purchase of property, plant and equipment | (10) | (6) |
| Purchase of intangible assets | - | (14) |
| Proceeds of property plant and equipment | 7 | - |
| Interest received | 4 | 3 |
| Net cash used in investing activities | 1 | (17) |
| Financing activities | ||
| Decrease/increase in borrowings | (890) | 436 |
| Proceeds from issue of share capital | 650 | - |
| Associated cost of share issue | (87) | - |
| Interest paid | (57) | (84) |
| Net cash from financing activities | (384) | 352 |
| Net changes in cash and cash equivalents | 50 | (397) |
| Cash and cash equivalents, beginning of year | (169) | 228 |
| Cash and cash equivalents, end of year | (119) | (169) |
1. Loss per share
| 2009 | 2008 | |||||
|
| Loss | Weighted average number of shares | Loss per share | Profit/ (loss) | Weighted average number of shares | Loss per share |
| £'000 | £'000 | p | £'000 | £'000 | p | |
| Basic loss per share | (370) | 47,770 | (0.77) | (1,922) | 31,692 | (6.06) |
| Impairment of goodwill | - | - | - | 1,071 | - | - |
| Adjusted loss per share | (370) | 47,770 | (0.77) | (851) | 31,692 | (2.69) |
The weighted average number of shares excludes 183,953 (2008 183,953) shares held by the Employee Share Benefit Trust.
There is no difference in either 2009 or 2008 between the basic and diluted loss per share.
2. Reconciliation of movements in equity
|
| Share capital | Share premium | Merger reserve | Employee share benefit reserve | Total equity | ||
| Currency reserve | Retained earnings | ||||||
|
| £'000 | £'000 | £'000 | £'000 |
| £'000 | £'000 |
| At 1 April 2007 | 1,594 | 679 | 90 | (61) | - | (513) | 1,789 |
|
| - | - | - | - | 4 | - | 4 |
| Loss for the year | - | - | - | - | - | (1,922) | (1,922) |
| At 1 April 2008 | 1,594 | 679 | 90 | (61) | - | (2,435) | (129) |
| Issue of new shares | 3 | 647 | - | - | - | - | 650 |
| Associated cost of new shares issued | - | (87) | - | - | - | - | (87) |
| Currency adjustments | - | - | - | - | (1) | - | (1) |
| Loss for the year | - | - | - | - | - | (370) | (370) |
| At 31 March 2009 | 1,597 | 1,239 | 90 | (61) | 3 | (2,805) | 63 |
3. The financial information in this preliminary announcement does not constitute the company's statutory accounts for the years ended 31st March 2009 or 31st March 2008 but is derived from those accounts. The statutory accounts for 2008, prepared in accordance with IFRSs as adopted by the EU have been delivered to the Registrar of Companies and those for 2009; will be delivered following the Company's annual general meeting. The auditors' reports on the accounts for both years were unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports and did not contain statements under the Companies Act 1985 s237(2) or (3).
4. Copies of the statutory accounts for the year ended 31 March 2009 will be posted to all shareholders. Additional copies will be available from the Company Secretary, Highams Systems Services Group plc, Quadrant House, 33/45 Croydon Road, Caterham, Surrey, CR3 6PB and will be available to download from the investor relations section on the Company's website www.highamsrecruitment.com